That bromide hit home for William N. Kelley last week when he was ousted as CEO of the University of Pennsylvania Health System, the latest in a legion of health-care executives to have been tossed overboard in the turbulent waters reshaping the health industry.

What's a health care exec to do?

While Kelley's former employer is vastly larger and different in other ways, a page or two torn from the playbook of a much smaller health-care institution, the Devereux Foundation, might be useful for any health-care provider in a financial bind.

Villanova-based Devereux recently became the first nonprofit human-service provider to get an A-minus rating from Standard and Poor's. One of the nation's largest mental health-care providers, with operations in 13 states, Devereux apparently has its senior VP of finance, Robert Kreider, to thank for its investment-grade rating.

Devereux's achievement is all the more noteworthy given the especially sad state of mental-health policy in our country. Part of Kreider's strategy relied on the fact that Devereux has operations in a multitude of states, so its reliance on any one payor is less profound than a competitor with a concentration of facilities in one state or another.

That pleased the people at S&P.

It also helped that Devereux's earnings have been consistent, delivering a bottom line of $4 million to $5 million each of the last five years.

When he arrived at the scene, in 1994, the situation could barely have been bleaker. To wit:

4 After the first nine months of that fiscal year, Devereux had already posted a $4 million loss from operations, its third consecutive money-losing year.

4 Devereux had an unfunded liability of $38 million to provide lifetime care to a variety of handicapped individuals.

4 Letters of credit issued in support of its debt faced renewal by 1996 or 1997, but weren't expected to be renewed.

Less than two years later, by late 1995, Devereux was sitting pretty, having secured $47 million in newly issued AAA-rated tax-exempt debt. How did it do it?

First, Kreider got a little lucky. A major benefactor of Devereux pledged to make a major contribution each year for a minimum of 30 years to help offset Devereux's continuing care obligations. That, along with a fresh look that led to a downward revision in expected increases in patient expenses, allowed Devereux to reduce its continuing care liability from $38 million to $22 million.

Next, a major asset write-down of a Houston operation allowed Devereux to reduce depreciation, boost its income sheet and demonstrate to its banks and other creditors that Devereux could recognize and acknowledge its mistake in overestimating the book value of the facility.

Devereux also began to treat current income and capital gains from its investments as operating income, a change that increased that income statement entry by more than $2 million in 1994 and 1995 and further distracted the attention of credit reviewers from operating losses.

The biggest change, though, came in making the $40 million Devereux endowment work harder, adoping a rule allowing Devereux to spend an amount equal to about 5 percent of the endowment each year in support of operations.

Devereux also used $9 million of the endowment's fixed-income investments as collateral for its workers' compensation obligations, reducing Devereux's revolving credit need from $22 million to $13 million.

All of these maneuvers, plus others on the operations side of the business, were key if Devereux hoped to ever gain access to long-term capital.

Kreider's next move: try to secure a preliminary indication of an investment grade rating from S&P, which could then be leveraged into a commitment from a municipal bond insurer to provide coverage, which would then cause the bonds to be rated AAA and thereby lower the cost of the capital it needed.

By May 30, 1995, Kreider et al. had the preliminary indication Devereux needed. From then on, what lay ahead was a relative cakewalk.

On the day it had worked so hard to reach, Dec. 5, 1995, Devereux's long-term fixed rate bonds were sold at a "true" interest cost of 5.34 percent, savings it millions in interest expenses and positioning it compete once again in one of the toughest periods in American health-care industry history.

Oh, and that A-minus rating? Devereux used it to issue another $15 million in debt in September -- without having to turn to an insurer, of course.

Allen Greenberg, the editor of the Philadelphia Business Journal, can be reached at agreenberg@amcity.com.